BIR backs High Court decision on tax refund

THE Bureau of Internal Revenue (BIR) backed the reversal of the Supreme Court ruling on San Roque Power Corp.’s (SRPC) claim for P483.8 million tax refund.

Commissioner Kim Jacinto-Henares, in a phone interview with The Manila Times on Tuesday, said a closed-door meeting was held last week between officials of the European Chamber of Commerce of the Philippines (ECCP) and the Department of Finance to discuss the situation of SRPC.

Henares explained that SRPC did not comply with the 120-day mandatory period for its claim for 2001 tax refund.

“The rule is mandatory, they should have filed it within 120 days and within 30 days on the lapse . . . [of the mandatory period], they should go to court,” she said.
Henares said SRPC filed its 2001 claim in 2003.

“How do they try to circumvent the law by filing an amended return when it is no longer allowed?” she added.

Section 112 of the 1997 National Internal Revenue Code gives the internal revenue commissioner 120 days from the date of submission of documents by the claimant to decide if the bureau would grant a refund or issue the tax-credit certificate for creditable input taxes.

The claimant could file an appeal with the Court of Tax Appeal (CTA) within 30 days upon receipt of an unfavorable ruling.

In February, the Supreme Court denied the tax refund claim of the SRPC, which poured in $1.2-billion worth of investments to build a hydroelectric power plant in Pangasinan province 10 years ago.

The High Tribunal ruled that SRPC was ineligible to claim P483.8 million in refunds because the power plant did not comply with the mandatory procedures.

The SPRC earlier got a favorable decision from the CTA and the High Court. However, the tribunal reversed its ruling after the BIR filed an appeal.

Earlier, ECCP External Affairs Vice President Henry Schumacher told The Manila Times that the Supreme Court and the BIR were “ganging up on foreign investors” by making it difficult for them to receive fiscal incentives such as duty and tax-free imports for capital equipment of priority sectors.

He added that the SRPC case could turn off investors looking to do business in the Philippines.

This was denied by Henares.

“We are not ganging up on them. If they are good investors and they have good faith in the Philippines, they should follow the law of this country,” the BIR chief said.